Income Tax Appellate Tribunal - Mumbai
Ito 9(1)(4), Mumbai vs Automatic Tiles & Marbles Industries ... on 29 August, 2017
आयकर अपील
य अ धकरण "K" यायपीठ मंब
ु ई म ।
IN THE INCOME TAX APPELLATE TRIBUNAL "K" BENCH, MUMBAI
BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER
AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A. No. 928/Mum/2017
( नधा रण वष / Assessment Year : 2009-10)
Income Tax Officer - 9(1)(4 ), बनाम/ M/s Automatic Tiles &
Room No. 260A, 2 n d floor, Marble s Industrie s Pvt.
v.
Aayakar Bhavan, M.K. Road, Limited,
Mumbai - 400 020. Plot No. 13-14,
Surve y No., 79,
Mittal Ind ustrial Estate,
Opp J.B. Nagar,
Andheri -Kurla Road ,
Andheri (East),
Mumbai - 400 059.
थायी ले खा सं . /PAN : AAACA4551H
(अपीलाथ /Appellant) .. ( यथ / Respondent)
Revenue by : Shri V. Jenardhanan
Assessee by : Shri Kiran Mehta
ु वाई क तार ख / Date of Hearing
सन : 22.08.2017
घोषणा क तार ख /Date of Pronouncement : 29.08.2017
आदे श / O R D E R
PER RAMIT KOCHAR, Accountant Member
This appeal, filed by the Revenue, being ITA No. 928/Mum/2017, is directed against the appellate order dated 30.11.2016 passed by the learned Commissioner of Income Tax (Appeals)- 16, Mumbai (hereinafter called "the CIT(A)"), for assessment year 2009-10, appellate proceedings before learned CIT(A) had arisen from the assessment order dated 26th March, 2015 passed by learned Assessing Officer (hereinafter called "the AO") u/s 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter called "the Act").
2 ITA 928/Mum/2017
2. The grounds of appeal raised by the Revenue in the memo of appeal filed with the Income-Tax Appellate Tribunal, Mumbai (hereinafter called "the tribunal") read as under:-
"Whether on the facts and in the circumstances of the case and in law, the Ld. CIT(A) is erred in holding that the suppressed profit on account of bogus transaction was to be estimated at 12.5% of the net purchases ignoring the fact that the assessee was a manufacture who consumes the purchases made by it in the course of its business; that one to one co-relation between item of purchase and sale cannot be established in such case; and therefore, the total income arrived on the basis of estimation of profit attributable to such bogus purchase is not valid in such cases.
The appellant prays that the order of the CIT(A) on the above ground be set aside and that of the ITO-9(1 )(4) be restored."
3. The brief facts of the case are that the assessee company is engaged in the business of manufacturing and selling of pavar blocks and tiles. The return of income was e-filed by the assessee u/s 139 on 23.11.2010 declaring total income at Rs.24,60,664/- , which was processed by Revenue u/s 143(1) of the Act . Subsequently the case of the assessee was selected for framing scrutiny assessment by issue of notice u/s 143(2) of the Act dated 25.08.2011 by the AO and assessment was framed by the AO u/s 143(3) , vide assessment order dated 25-11-2011 , wherein the returned income was accepted by the AO. Subsequently, information was received by the Revenue that the assessee had obtained bogus purchase bills from certain parties, which are hawala dealers as per list of suspicious dealers issued by the Maharashtra Sales Tax (VAT) Department. As per the said list, the assessee had made bogus purchases from the following four parties listed as hawala dealers by Maharashtra VAT authorities, totaling to Rs. 47,17,888/- during the subject assessment year:-
3 ITA 928/Mum/2017 Name TIN PAN Amount Tin cancelled Naman Enterprises 27450524228V AQEPK5024G 10,816 01.04.2007 Navdeep Trading 27540616280V AAAPV4487A 2,752,535 26.06.2007 Corpn.
Manishi Traders 27260523120V AAIHP5622D 14,000 13,04,2006 Great International 27680504653V 1,940,537 23.12.2005 TOTAL 47,17,888 Information was also received by the AO from the office of DGIT(Inv.), Mumbai with respect to bogus/accommodation entries provided by the aforesaid parties. The assessment was reopened by the AO u/s 147 and notice u/s.148 of the Act was issued by the AO to the assessee company on 3rd March, 2014 which was duly served on the assessee, the said reopening was within four years from the end of assessment year. The assessee vide letter dated 02-09- 2014( submitted/filed before AO on 22-01-2015) stated that return of income filed on 23-11-2010 be treated as return of income in response to notice u/s
148.The reasons recorded for reopening of the assessment was provided to the assessee by the AO during reassessment proceedings , which are as under:
"Subsequently, it has come to the knowledge that the assessee was involved in bogus purchase/ hawala transactions during the F.Y. 2008-09 relevant to A.Y. 2009-10. The assessee was involved in bogus purchases transaction amounting to Rs. 47,17,888/- during the Financial year 2008-09 relevant to the assessment year 2009-10. The assessee had made these bogus purchases through following parties:-
Name TIN PAN Amount Tin
cancelled
Naman Enterprises 27450524228V AQEPK5024G 10,816 01.04.2007
Navdeep Trading 27540616280V AAAPV4487A 2,752,535 26.06.2007
Corpn.
Manishi Traders 27260523120V AAIHP5622D 14,000 13,04,2006
Great International 27680504653V 1,940,537 23.12.2005
TOTAL 47,17,888
4 ITA 928/Mum/2017
3. It is further, noticed that the Maharashtra sales tax department has also declared above parties as Hawala traders. The TINs allotted to these parties have also been cancelled by the Sales tax department.
4. Further, an information has been received from the office of the DGIT vide letter dated No. Corr. Field/DGIT (Inv) dt. 26.12.2013 stating that M/s AUTOMATIC TILES AND MARBLE INDUSTRIES PVT LTD has made bogus purchase through above parties. It is further intimated that Shri Tejas Shah of M/s Relcon Infra Project Ltd has admitted in the statement recorded by DDIT to have entered into bogus transaction with above concerns. The parties also failed to produce any supporting evidence to prove the purchase transactions.
5. From the above facts, it is clear that the assessee has booked bogus purchases in its books of account to the tune of Rs.47,17,888/- and has failed to disclose fully and truly all material facts in respect of these purchases necessary for its assessment for the A. Y. 2009-10. In view of the above, I have reasons to believe that an income of Rs. 47,17,888/- has escaped assessment for the assessment year 2009-10. Notice u/ s. 148 issued after obtaining approval of Addl.CIT, Rg-8(l), Mumbai on 03.03.2014 vide inward No.1105."
During the course of re-assessment proceedings u/s 147/148, the assessee was asked by the AO to submit the following details:
"Notice u/s. 142(1) of the Act dated 09.02.2015 was issued to the assessee inter alia calling for details of income & expenditure, sale & purchases and other balance sheet items. The assessee, with respect to aforesaid alleged purchases from Hawala parties, was requested to furnish following details:
(i) Copy of purchase order, original stamped tax invoice, delivery challans, lorry receipts, gate pass, receipt note, transportation details;
(ii) Description of material purchased;
5 ITA 928/Mum/2017
(iii) Daily Stock Register;
(iv) Quantitative disposal of these purchases showing corresponding sale/yield of finished product; ,
(v) Cheque encashment certificate from Bank/Copies of account payee cheques with recipient banks stamp.
(vi) Tax audit report (with all attachments) for A.Y. 2008-09 & A.Y. 2010-11;
(vii) Comparison of following accounting ratio for last three assessment years; Gross Profit ratio, Net Profit/Turnover, Stock-in-trade/Turnover, Material consumed/finished goods produced ratio.
(viii) Details of set off of VAT claimed in respect of aforesaid purchase."
Notices u/s.133(6) of the Act dated 15th January, 2015 were issued by the AO to the aforesaid four parties allegedly involved in providing bogus accommodation entries by issuing bogus bills without supplying any material, at their respective registered addresses, however, these notices u/s 133(6) returned un-served from the postal authorities with the following postal remarks:
Naman Enterprises Unclaimed
Navdeep Trading Corpn. Not known
Manishi Traders Refused
Great International Left
Enquiries were also made by the AO from the Banks of aforesaid hawala dealers wherein notices u/s 133(6) were issued by the AO to the bankers of the said hawala dealers. The assessee was informed by the AO about these bank enquiries and responses received from bankers of the said alleged hawala dealers. The assessee was provided with copies of affidavit cum declaration and statements filed by these hawala dealers before MVAT 6 ITA 928/Mum/2017 authorities , wherein these alleged hawala dealers have confessed that they have only issues bogus bills without supplying any material/goods. The assessee was also asked to respond to the same.
However, the assessee did not furnish any details/confirmations or whereabouts of the aforesaid parties. The assessee although submitted its bank statement and submitted that the payments have been made by account payee cheques against purchases made from these parties. The details of purchases made from these parties were submitted by the assessee before the AO. The enquiries with banks revealed that there were dealing of these hawala dealers with other bogus hawala dealers and cheques deposited were encashed regularly in cash immediately after encashments. The assessee was confronted with the same. The assessee submitted copies of purchase bills, delivery challans and copy of stock register before the A.O. and complete statement of stock summary with respect to the parties from whom these purchases were made. The assessee also submitted quantitative stock statement of the items dealt with these four parties namely sand, powder and metal, were also submitted which contained details of name of party, item and quantity etc. . From the quantitative stock statements , some quantitative differences were noticed by the A.O. . The AO also observed that lorry receipts were not produced. The AO observed that delivery challans did not contained the details of place of dispatch of the material. The AO also noticed some other discrepancies w.r.t. these purchases and stocks including non submission of process chart and details of consumption/utilization /yield of these material for production of finished goods. The assessee submitted the comparative gross profit and net profit ratio for A.Y. 2008-09 to A.Y. 2012-13, which is reproduced below:-
STATEMENT OF COMPARATIVE G.P.& N.P. Asst. Year SALES COGS MANUF.EXP INC/DEC GROSS GP % NP%
7 ITA 928/Mum/2017 STOCK PROFIT A.Y. 08-09 66,971,752 39,030,013 9,634,377 74,157 18,381,519 27% 3% A.Y. 09-10 115,367,929 79,204,441 13,099,889 3,507,617 26,571,216 23% 1% A.Y.10-11 85,596,159 51,993,477 10,230,217 (868,781) 22,503,634 26% 2% A.Y. 11-12 74,909,679 44,604,456 7,373,261 (2,700,046) 20,231,926 27% 1% A.Y. 12-13 74,494,552 45,750,350 7,165,773 (163,304) 21,415,125 29% 1% The A.O. observed that there was a fall in GP ratio for the year under consideration i.e. A.Y. 2009-10. It was observed by the A.O. that if the GP ratio is computed excluding the alleged hawala purchases, it fetched similar GP ratio as compared to other years i.e. GP of 27%. The assessee was asked to explain as to why the purchases from hawala dealers amounting to Rs. 47,17,888/- should not be treated as non-genuine/bogus and should not be added as income of the assessee. The assessee, in reply, produced copies of bills, invoices, delivery challans, goods inward note , ledger account of these parties, bank statement etc. . It was explained by the assessee before the AO that the purchases were made for production/trading and the sales are genuine and hence no disallowance of purchases are warranted. It was explained that the purchases were made from local market hence there was no need to engage lorry. It was submitted by the assessee that the GP and NP ratio for the year were fairly comparable. It was submitted that the parties were not bogus. The parties had addresses which was duly verified by the VAT department while issuing registration to these parties under VAT. The assessee submitted that parties had given affidavit/statement before the VAT department which clearly shows that the parties were very much available and in existence, hence, the parties were not bogus. The A.O. rejected the contention of the assessee and held that the assessee could not substantiate its claim of purchases from the aforesaid parties with the help of books of accounts, the stock statements are not tallying, the bills issued by these parties are not proper, the assessee could not substantiate details of use and yield of such material , there is no mentioning of maintenance of stock records as per tax audit report , GP ratio has fallen from 27% to 23%, NP ratio has fallen from 3% to 1% and the assessee could not controvert the 8 ITA 928/Mum/2017 statements made by these parties before MVAT authorities and also could not produce the parties before the AO, and accordingly the A.O. made the addition of Rs. 47,17,888/- as the purchases were found to be not genuine, vide assessment order dated 26-03-2015 passed by the AO u/s 143(3) r.w.s. 147 of the 1961 Act.
4. Aggrieved by the assessment order dated 26-3-2015 passed by the A.O. u/s 143(3) r.w.s. 147 of the 1961 Act, the assessee carried the matter in appeal before the ld. CIT(A).
5. Before the ld. CIT(A) , the assessee submitted that the assessee is in the business of manufacturing solid cement concrete blocks of various shapes and thickness and raw material were purchased from these four alleged hawala dealers namely sand , metal and stone powder , which is required for manufacturing the products manufactured by the assessee. The assessee submitted that GP ratio cannot be compared with preceding year as this year the turnover increased which included outsourced turnover wherein some of the work was outsourced which led to fall in GP and NP ratio. The assessee also submitted corrected stock statements wherein the stock tallied and it was brought to the notice of learned CIT(A) that the difference in stock statement was due to clerical error due to cut and paste errors. The assessee submitted that one to one correlation of utilization of these raw material with production of finished goods is proved. The details of input/ output ratio were given for three years and it was submitted that these raw materials were consumed earlier also and Revenue accepted the same. It was submitted that the complete quantity records and registers were maintained for excisable and non excisable goods purchased and sold by the assessee. It was explained that all payments were made by crossed account payee cheques. It was submitted that all details were submitted before the AO. The assessee is subjected to excise duty and had maintained complete quantity record of 9 ITA 928/Mum/2017 purchases and sales and also stock records as mandated under excise laws. It was submitted that these raw materials were used for manufacture of finished goods and once sales are held to be genuine, the purchases cannot be disallowed. It was submitted that statement/affidavits given by these parties before MVAT authorities were not furnished by the AO to the assessee for rebuttal.
The ld. CIT(A) observed that in nutshell the assessee has duly explained the consumption/sale of the material for production of finished goods. It was observed by learned CIT(A) that the transportation of the material also stood proved. The ld. CIT(A) observed that the parties could not be located by the assessee and it is admitted by the assessee that these parties could not be produced before the Revenue. The learned CIT(A) observed that notices u/s 133(6) of the Act were issued by the AO to all the afore-said parties but the same were returned un-served. Thus, the learned CIT(A) observed that the onus cast on the assessee did not stand discharged as these purchases are appearing in the books of the assessee and these dealers have confessed before MVAT authorities that they were engaged in issuing bogus bills without supplying material physically, and the assessee could not produce these parties before Revenue. The learned CIT(A) observed that the A.O. has not doubted the genuineness of the sales as well consumption/sales, the motive behind obtaining bills from these parties appears to be inflation of purchase prices so as to suppress true profits. The ld. CIT(A) observed that the suppressed profit embedded in purchases which the assessee would have made from these bogus dealers need to be brought to tax. The ld. CIT(A) after considering the facts of the case, estimated the suppressed profit to the extent of 12.5% of the purchases made from these bogus parties, vide appellate order dated 30-11-2016.
10 ITA 928/Mum/2017
6. Aggrieved by the appellate order dated 30-11-2016 passed by the ld. CIT(A), the Revenue is in appeal before the Tribunal.
7.The ld. D.R. submitted that this is Revenue's appeal. The A.O. has made 100% disallowance of the purchases made from bogus parties while the ld. CIT(A) reduced the same to 12.5% of alleged bogus purchases on account of suppressed profits due to these inflated purchases. Further, the ld. D.R. relied on the assessment order of the A.O. and prayed that the assessment order passed by learned AO be confirmed and the appellate order of learned CIT(A) be set aside.
8. The ld. counsel for the assessee, at the outset, submitted that the assessee has accepted the appellate order passed by the ld. CIT(A) wherein additions were upheld/sustained by learned CIT(A) to the tune of 12.5% of the alleged bogus purchases and no appeal has been filed by the assessee against the said appellate order dated 30-11-2016 passed by the ld. CIT(A).It was submitted that the assessee is subject to excise duty, all stock, consumptions/ utilization records for consuming/utilizing raw material are maintained and produced before the authorities below. The material so purchased from these alleged four hawala dealers were utilized for production of finished goods dealt in by the assessee and the said material was also purchased in preceding years and utilized/consumed for production of finished goods dealt in by the assessee which was accepted by Revenue. It was submitted that the AO made additions to the tune of 100% of alleged bogus purchases to the tune of Rs. 47,17,888/- from these four alleged hawala dealers which was reduced to 12.5% of alleged bogus purchases by learned CIT(A), thus, prayer was made by learned counsel for the assessee for upholding of appellate order of learned CIT(A).
11 ITA 928/Mum/2017
9.We have considered rival contentions and also perused the material available on record. We have observed that the assessee company is engaged in the business of manufacturing of solid cement concrete blocks of various shapes and thickness. The assessee filed its return of income u/s 139 on 23- 11-2010 which was processed by Revenue u/s 143(1) of the Act and thereafter the assessment was originally framed u/s 143(3) on 25-11-2011 accepting the returned income. Subsequently, information was received by the Revenue that the assessee had obtained bogus purchase bills from certain parties, which are Hawala dealers as per the list of suspicious dealers prepared by the Maharashtra Sales Tax (VAT) Department. The assessee had allegedly made bogus purchases from the following four parties , amounting to Rs. 47,17,888/-.
Name TIN PAN Amount Tin
cancelled
Naman Enterprises 27450524228V AQEPK5024G 10,816 01.04.2007
Navdeep Trading 27540616280V AAAPV4487A 2,752,535 26.06.2007
Corpn.
Manishi Traders 27260523120V AAIHP5622D 14,000 13,04,2006
Great International 27680504653V 1,940,537 23.12.2005
TOTAL 47,17,888
The said hawala dealers were engaged in issue of bogus bills without any supply of material as per their statements/affidavits filed by these bogus dealers before MVAT authorities. The assessee's case was reopened by the A.O. u/s 147 and notices u/s 148 of the Act was issued on 3rd March, 2014 , which was duly served upon the assessee , and the said reopening u/s 147 was within four years from the end of the assessment year. The reasons recorded were duly furnished to the assessee by the AO. During the course of assessment proceedings and appellate proceedings, the assessee explained the consumption/utilization of the raw materials so purchased from these alleged bogus dealers for production of finished goods. The assessee had produced the purchase bills and other relevant documents . It was also 12 ITA 928/Mum/2017 explained that the assessee had made the payments though banking channel by issue of account payee cheques. The assessee also explained GP ratio for A.Y. 2008-09 to A.Y. 2012-13 which is reproduced below:-
STATEMENT OF COMPARATIVE G.P.& N.P. Asst. Year SALES COGS MANUF.EXP INC/DEC GROSS GP % NP% STOCK PROFIT A.Y. 08-09 66,971,752 39,030,013 9,634,377 74,157 18,381,519 27% 3% A.Y. 09-10 115,367,929 79,204,441 13,099,889 3,507,617 26,571,216 23% 1% A.Y.10-11 85,596,159 51,993,477 10,230,217 (868,781) 22,503,634 26% 2% A.Y. 11-12 74,909,679 44,604,456 7,373,261 (2,700,046) 20,231,926 27% 1% A.Y. 12-13 74,494,552 45,750,350 7,165,773 (163,304) 21,415,125 29% 1% The assessee submitted that the GP and NP for the year were fairly comparable. It is submitted the purchases made were genuine purchases. Notice u/s 133(6) of the Act were issued by the AO to all the hawala parties but the notices returned un-served. The assessee has expressed its inability to produce the parties before the A.O./CIT(A) as these parties were not traceable. The AO also made enquiries with the bankers of these alleged hawala dealers which revealed that these parties were dealing with other hawala parties as also cash is withdrawn immediately after deposit/encashment of cheques. The AO observed that the GP and NP ratio of the assessee has fallen in this year vis-à-vis preceding year and if the entire purchases are added then the GP and NP ratio will be comparable. The assessee has explained that its turnover increased substantially during the year which made assessee to outsource some work which led to fall in profits, which was not controverted by the AO. The A.O. made 100% disallowance of these alleged bogus purchases on the ground that these are bogus purchases wherein no material was supplied by these parties and these bogus bills were obtained merely to reduce profits, which disallowance has been restricted to 12.5% of the alleged bogus purchases by the ld. CIT(A) on the grounds that utilization/material consumption stood proved, sales are not doubted but the assessee could not discharge its burden of producing the parties in the midst 13 ITA 928/Mum/2017 of statements/affidavits by these alleged hawala dealers that they have only issued bogus bills without supplying any material physically which led CIT(A) to conclude that the assessee has obtained material from some other parties and bills were obtained from these parties at inflated prices to suppress profits. We have observed that the assessee has duly explained the consumption/utilization of material and the assessee is also maintaining excise record and is subject to excise scrutiny/audit. There was minor difference in the stock reconciliation submitted by the assessee before the AO which the assessee rectified before CIT(A) and explained the same due to clerical error/cut and paste errors. The ld. CIT(A) has also gone through the consumption patterns and no adverse comments have been made. It is also a fact that the assessee could not produce the parties before the authorities below as these parties are not traceable. The attempt made by the AO to trace these parties also did not yield results. The content of the statements/affidavits were brought to the notice of the assessee by the AO as is emerging from the assessment record and the contention of the assessee that it did not get chance to rebut the said statement cannot be accepted. The purchases are appearing in the books of the assessee and primary onus is on the assessee to prove that the purchases are genuine. The assessee has brought on record sufficient material to prove consumption/utilization of the said material which is not doubted by the learned CIT(A). The assessee's sale are not doubted by the AO. The assessee is subject to excise duty and all stock records are claimed to be kept by the assessee.
Reference is drawn to decision of Hon'ble Supreme Court in the case of Kachwala Gems v. Jt. CIT [2007] 288 ITR 10/158 Taxman 71 (SC), wherein Hon'ble Lordships held as under :
"4. The facts of the case are in a short compass. The appellant-assessee deals in precious and semi-precious stones. In the course of assessment, the Assessing Officer noticed the following defects in the books of account of the assessee :
14 ITA 928/Mum/2017 '1. The assessee has not maintained and kept any quantitative details/stock register for the goods traded in by the assessee.
2. There is no evidence on record or document to verify the basis of the valuation of the closing stock shown by the assessee. The assessee is not able to prepare such details even with the help of books of account maintained, purchase bills & Sale Invoices.
3. Provisions of section 145(3) are clearly attracted in this case.
4. The genuineness of purchases to the extent of Rs. 42 lakhs (approx.) is not proved without any doubt.
5. The GP rate declared by the assessee at 13.49 per cent during the assessment year is not a match to the result declared by the itself in the previous assessment years.
6. M/s. Gem Plaza, engaged in local sales of similar goods declared voluntarily rate of 35 per cent in its assessment for the assessment year 1997-98.
7. M/s. Dhadda Exports, another assessee dealing in same items, but doing export business declared GP rate of 43.8 per cent (even without considering the value of export incentives) in assessment year 1997-98.'
5. Thereafter, the books of account of the assessee were rejected by the Assessing Officer and he resorted to best judgment assessment under section 144 of the Income-tax Act. The Assessing Officer in the assessment order mentioned some comparable cases and was of the view that the case of the assessee is more or less having similar facts as that of M/s. Gem Plaza where the Gross Profit has been taken as 35.48 per cent. The Assessing Officer estimated the Gross Profit of the assessee as 40 per cent.
6. The Assessing Officer further held that the assessee has shown bogus purchases in order to reduce the Gross Profits.
7. In appeal, the Commissioner of Income-tax (Appeals) upheld most of the findings of the Assessing Officer, but reduced the Gross Profit from 40 per cent to 35 per cent.
8. In further appeal, the Tribunal had given further relief to the assessee and reduced the Gross Profit rate to 30 per cent.
9. The counsel for the assessee has submitted before us that the income- tax authorities wrongly held that appellant has shown bogus purchases, and the books of account were wrongly rejected.
10. In our opinion, whether there were bogus purchases or not, is a finding of fact, and we cannot interfere with the same in this appeal. As regards the rejection of the books of account, cogent reasons have been given by the income-tax authorities for doing so, and we see no reason to take a different view.
11. It is well-settled that in a best judgment assessment, there is always a certain degree of guess work. No doubt the authorities concerned should try to make an honest and fair 15 ITA 928/Mum/2017 estimate of the income even in a best judgment assessment, and should not act totally arbitrarily, but there is necessarily some amount of guess work involved in a best judgment assessment, and it is the assessee himself who is to blame as he did not submit proper accounts. In our opinion, there was no arbitrariness in the present case on the part of the income-tax authorities. Thus, there is no force in this appeal, and it is dismissed accordingly.
No costs."
Keeping in view the entire factual matrix of the case, in our considered view, the restriction of disallowance to 12.5% of the bogus purchases as was done by learned CIT(A) towards embedded profits in obtaining inflated bills from these alleged bogus dealers while actual material was sourced from some other sources is a fair and reasonable estimate which is a plausible view taken by learned CIT(A) and we are not inclined to interfere with the same. Under these circumstances, some estimates has to be made but the same has to be fair and honest, In our view, the view taken by learned CIT(A) in its appellate order is a plausible view and estimates made by the learned CIT(A) could not be said to be not an honest or fair estimate. The assessee has also not filed any appeal against the appellate order of the ld. CIT(A) which is accepted by the assessee and the same has attained finality so far as the assessee is concerned . Based on our above discussions and reasoning, we are not inclined to interfere with the appellate order of learned CIT(A) which we confirm/affirm. Revenue fails in this appeal. We order accordingly.
9. In the result, appeal of the Revenue in ITA No. 928/Mum/2017 for assessment year 2009-10 is dismissed.
16 ITA 928/Mum/2017 Order pronounced in the open court on 29th August 2017. आदे श क घोषणा खुले #यायालय म% &दनांकः 29.08.2017 को क गई ।
Sd/- sd/-
(C.N. PRASAD) (RAMIT KOCHAR)
JUDICIAL MEMBER ACCOUNTANT MEMBER
मुंबई Mumbai; &दनांक Dated 29.08.2017
[
व.9न.स./ R.K., Ex. Sr. PS
आदे श क! " त$ल%प अ&े%षत/Copy of the Order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent.
3. आयकर आयु:त(अपील) / The CIT(A)- concerned, Mumbai
4. आयकर आय:
ु त / CIT- Concerned, Mumbai
5. =वभागीय 9त9न?ध, आयकर अपील य अ?धकरण, मुंबई / DR, ITAT, Mumbai "G" Bench
6. गाडC फाईल / Guard file.
आदे शानुसार/ BY ORDER, स या=पत 9त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai